But GG isn’t a low junior horse (that might be what he happened to be doing while leased but that wasn’t his value because he has more scope/experience/capability)! That’s the difference. Do you think the price of a confirmed Grand Prix horse (average or above-average) is equal to the value of a child/adult jumper?
It’s trading a 5 figure horse for a 6 figure horse!
1/3 of $250,000 (low estimate for a jumps by braille GP horse) for a year is $83,000 AND at the end of the year you get the horse back to re-lease and/or sell (and for all we know, the lessee had an agreement to potentially buy the horse at the end of the lease)
Child/adult jumper is $50,000 (high estimate) and you don’t get it back after you sell
Even assuming the lease was based on the value of a junior jumper. That’s GOT to be valued more than a child/adult jumper and even if the lease fee is equal to the sale price-- with a lease you still OWN the asset at the end. It’s not comparable or equal.
Even assuming an incremental difference in value… At the end of a year, which scenario has you better off financially…
A. You sell a horse for $25,000
B. You lease a horse worth $35,000 for one year for $11,000 and then he comes back
Scenario A, you have $25,000. Scenario B you have $11,000 plus an asset, perhaps a bit depreciated, but worth in the neighborhood of $35,000